I used to think this sort of thing was a valuable use of my time but I now have over $200k in annual revenue and we pay less that $5 a month in raw compute (and that's nearly all S3). My Co-founder is always worried about the cost of our AWS but so far we just haven't witnessed it.
My mandate has always been the price should be able to scale to 0. So no EC2, has made building some longer running tasks a bit more complicated, but that's just because we didn't know how to do it before we started.
Anyway, you have a tiny on-demand business, as I caveated above. You could run it just fine on a nano ec2 instance if you needed, which is $2-3/mo.
In the end you replaced sysadmin with DevOps and got up charged multiples.
Some examples which come to mind:
* Comparing S3 to the on-premise tape system but ignoring the fact that it involved an expensive tape robot, DR had access times measured in days, etc.
* Comparing S3 to on-premise storage, ignoring the difference in redundancy, forcing users to handle bitrot at the application level, and the procurement process meaning that when they ran out of storage it took months of telling people they couldn't allocate more.
* Saying their devops engineer cost twice as much as their sysadmins (true) but then when you look the devops engineer is using automation and managing literally a hundred times more systems than the “cheaper” ops team.
* Saying their cost to run a VM was cheaper than EC2, which true if you looked only at the instance but not when you calculated how much they were spending on underutilized VM hosts, power / HVAC, facilities people, etc.
It's totally possible to beat a major cloud provider on costs[1] but you usually need to be operating at fairly large scale to even approach the break-even point. This is especially true when you have regulatory or policy requirements for things like security and you include the cost of monitoring all of the things which fall under the cloud provider's responsibility — management networks, firmware version management, robust logging and IAM, etc. are all easy to accidentally exclude when making comparisons.
1. Network egress as the most obvious area to attack
